Editorials

Pinder projects confidence on FTX

Attorney General Ryan Pinder last night addressed the nation regarding the collapse of crypto currency giant FTX.

While Pinder should have spoken sooner, he did a commendable job of defending the country’s reputation in the crypto space.

There are still questions that remain about the Securities Commission of The Bahamas’ oversight of FTX before being placed into liquidation, regarding the company’s reserves and corporate governance; and there are countless questions about what actually occurred and what happens next.

However, Pinder made it clear that we are a country of laws and rules, and FTX was an extremely wide-ranging and complex operation that The Bahamas alone was not tasked with regulating.

We have always maintained that former FTX CEO Sam Bankman-Fried bears ultimate responsibility for what has occurred at FTX, as he has more than once said.

But there is no escaping that The Bahamas has received a black eye from this fiasco, no matter how anyone in the Progressive Liberal Party would seek to downplay it.

Previous attempts to minimize the enormity and impact of what this means for The Bahamas has been one of the most misguided public relations strategies we have ever seen.

Thankfully, Pinder conveyed an understanding of the magnitude of what has occurred and put into perspective the global volatility of the crypto space.

“Any attempt to lay the entirety of this debacle at the feet of The Bahamas, because FTX is headquartered here, would be a gross oversimplification of reality,” he said.

“The dozens and dozens of companies involved, registered in numerous jurisdictions across the world, the scope of related parties, including some of the world’s most sophisticated investors, demonstrate the cross-border, multi-jurisdictional nature of this event.

“And it is deeply misguided to conclude that reluctance to communicate the details of an active investigation means that nothing is happening; in fact, the government’s discretion stems from how seriously we take our commitment to the rule of law and the independence of the securities regulator.

“We have been shocked at the ignorance of those who assert that FTX came to The Bahamas because they did not want to submit to regulatory scrutiny; in fact, the world is full of countries in which there is no legislative or regulatory authority over crypto, but The Bahamas is not one of them.

“We have been able to assert our leadership in this new field because in the digital assets arena, what matters is not the size of your land mass, or the size of your GDP, but the ingenuity and rigor of your people and jurisdiction.”

As Pinder correctly pointed out, digital assets are used in jurisdictions throughout the world, whether there is a regulatory framework or not.

And crypto companies have gone down in flames the world over, whether there is a regulatory framework or not.

Pinder’s input was necessary to balance the speculative international reporting and commentary by those seeking to discuss The Bahamas without understanding what actually occurs here.

We are one of the most well-regulated financial services sectors on the planet.

That message needs to be driven over and over again, and the government needs to have eloquent, knowledgeable representatives speaking consistently to this.

We have had countless international outlets seek to interview journalists in our organization about FTX and all manner of ancillary issues ranging from taxes to culture, real estate and politics.

We prefer to report the story rather than be the story, but there must be sensible government surrogates who can provide context for those who may not understand certain nuances of what they are covering.

Pinder also injected a convincing optimism about the future that was sorely needed.

“A turbulent crypto-currency period on a global basis, and the downfall of a single Bahamian company, in no way threaten a bright future for The Bahamas,” he said. “Quite the opposite.

“Those entrepreneurs who are ready to create new financial products that serve a broader range of consumers, remain welcome to come to The Bahamas.

“They can be certain that we have in place a principled, fair, comprehensive and ethical regulatory regime. They can also be certain we will act quickly and decisively to enforce it, if and when our laws and regulations are breached. They will see that The Bahamas is a place of laws.”

How effective it will ultimately be remains to be seen, but Pinder’s clear-eyed certitude, confidence and effective communication are a welcome change.

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